Amazon is reportedly gearing up to expand the number of Whole Foods stores around the country to enable more customers to use its speedy delivery service, reported the Wall Street Journal.
According to the report in the Wall Street Journal, Whole Foods Market aims to have stores in more suburban areas where it has been gaining customers since Amazon bought it. Prior to the acquisition, Whole Foods was in layoff mode as store growth was slowing. One person familiar with the plans told the Wall Street Journal that in the Rocky Mountain region Whole Foods employees have visited retail spaces in Idaho, the southern part of Utah and Wyoming, areas where Whole Foods doesn't have a presence.
The report noted if Amazon does follow through with the plans it would increase competition in the supermarket industry where grocers have already taken steps to counter Whole Foods under Amazon's management. “Strategic investments to improve Whole Foods will only increase the already intense competitiveness in the grocery space,” Bob Goldin, co-founder of consulting group Pentallect, told the Wall Street Journal in the report.
Amazon wants to expand its Prime Now, two-hour delivery service and online grocery pickup from Whole Foods by as much as possible. It is already gearing up to expand the services to close to all of its 475 Whole Foods stores around the country, another person familiar with the plans told the Wall Street Journal.
Since Amazon acquired Whole Foods, one of the people close to the company told the Wall Street Journal, sales have increased but profits aren't up in part because the Prime discounts negatively impact margins at Whole Foods. Amazon is still focused for now on getting Prime up and running in as many as Whole Foods stores as possible, the source told the Wall Street Journal.